Comments on: My First Foray into Investing http://www.suburbandollar.com/2009/12/28/my-first-foray-into-investing/#utm_source=rss&utm_medium=rss&utm_campaign=my-first-foray-into-investing Where finance and reality meet Sat, 04 Feb 2012 21:54:17 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: LeanLifeCoachhttp://www.suburbandollar.com/2009/12/28/my-first-foray-into-investing/#comment-2187 LeanLifeCoach Mon, 28 Dec 2009 19:01:11 +0000 http://www.suburbandollar.com/?p=2202#comment-2187 If the relative cost is so high, why not only arrange for the investment to be made once every other month? At least that way your costs of investing are cut in half! If the relative cost is so high, why not only arrange for the investment to be made once every other month? At least that way your costs of investing are cut in half!

]]> By: Persfinanceguyhttp://www.suburbandollar.com/2009/12/28/my-first-foray-into-investing/#comment-2185 Persfinanceguy Mon, 28 Dec 2009 16:51:39 +0000 http://www.suburbandollar.com/?p=2202#comment-2185 Kyle, You have the right idea but you may want to go about it a little bit differently. These days, a positive investment return is hard to come by and it is quiet detrimental to put yourself in a 4% hole. Your strategy would make more sense if you were investing $1,000/month and paying $4 per trade, but not $100. My recommendation would be as follows: Open a brokerage account at a discount broker like Scottrade or TD Ameritrade. These brokers offer thousands of no-load/no-transaction fee mutual funds where there is no brokerage fee. You should be able to find an index-tracking mutual fund with a minimum investment of $250. For example, Scottrade offers an S&P 500 tracking fund (American Century Equity Index Fund, symbol: ACIVX). Put your first 2.5 months of savings aside in a bank account and when you reach $250, open a Scottrade account. Invest that $250 in the fund and then make automatic deposits every month into the Scottrade account. Although you can set up an automatic deposit into the brokerage account, you will have to purchase your shares every month. The beauty of this is that you will not be charged a commission at all when depositing additional money into this mutual fund. As your nest egg grows, you will be able to diversify further into additional no load/no transaction fee funds. For more, feel free to follow me on twitter: @Persfinanceguy and check out my blog: http://persfinanceguy.wordpress.com/. It is fairly new and I have not exactly covered this subject yet, but under the retirement posts, there are several beneficial ideas that should provide you some assistance. I hope this helps and let me know if you need additional information, I am happy to help. -PFG (Personal Finance Guy) Kyle,

You have the right idea but you may want to go about it a little bit differently. These days, a positive investment return is hard to come by and it is quiet detrimental to put yourself in a 4% hole. Your strategy would make more sense if you were investing $1,000/month and paying $4 per trade, but not $100. My recommendation would be as follows:

Open a brokerage account at a discount broker like Scottrade or TD Ameritrade. These brokers offer thousands of no-load/no-transaction fee mutual funds where there is no brokerage fee. You should be able to find an index-tracking mutual fund with a minimum investment of $250. For example, Scottrade offers an S&P 500 tracking fund (American Century Equity Index Fund, symbol: ACIVX). Put your first 2.5 months of savings aside in a bank account and when you reach $250, open a Scottrade account. Invest that $250 in the fund and then make automatic deposits every month into the Scottrade account.

Although you can set up an automatic deposit into the brokerage account, you will have to purchase your shares every month. The beauty of this is that you will not be charged a commission at all when depositing additional money into this mutual fund. As your nest egg grows, you will be able to diversify further into additional no load/no transaction fee funds.

For more, feel free to follow me on twitter: @Persfinanceguy and check out my blog: http://persfinanceguy.wordpress.com/. It is fairly new and I have not exactly covered this subject yet, but under the retirement posts, there are several beneficial ideas that should provide you some assistance.

I hope this helps and let me know if you need additional information, I am happy to help.

-PFG (Personal Finance Guy)

]]> By: TheDebtHawk.comhttp://www.suburbandollar.com/2009/12/28/my-first-foray-into-investing/#comment-2184 TheDebtHawk.com Mon, 28 Dec 2009 15:51:08 +0000 http://www.suburbandollar.com/?p=2202#comment-2184 4% is an awful lot. Another avenue to check out is buying stock through dividend reinvestment plans (DRIPs). 4% is an awful lot. Another avenue to check out is buying stock through dividend reinvestment plans (DRIPs).

]]> By: No Debt Planhttp://www.suburbandollar.com/2009/12/28/my-first-foray-into-investing/#comment-2183 No Debt Plan Mon, 28 Dec 2009 14:05:07 +0000 http://www.suburbandollar.com/?p=2202#comment-2183 As much as I like ING Direct, I don't like Sharebuilder. That 4% fee is huge. I'd much rather save up $1,000 or $3,000 and invest in a mutual fund with no fee. But that's just me! As much as I like ING Direct, I don’t like Sharebuilder. That 4% fee is huge. I’d much rather save up $1,000 or $3,000 and invest in a mutual fund with no fee.

But that’s just me!

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